All Forum Posts by: Shawn Mcenteer

Hi @Arjun Patel self managing is not tough.  Hiring PM in my opinion is a huge expense.  Majority of work come down screening tenants then having systems in place for if concerns on the property come up. You can self manage without making it a second job.

@Jake Yuskaitis

Reason investing in NJ when you work and live locally over OOS:

-You need a place to live, house hack instead of renting

-low money down loans, $50k can get you $1m property owner occupying 

-owner occupied interest rates

-no property management needed

-you live in the property that is your asset (you know the ins and out)

-Historically NJ Appreciated much higher than most markets around the nation 

-Rent increases year over year have potential to be large

-very low vacancy

-NJ land lording laws are tough for people who do no know the laws

Quote from @Uddipto Bose:

Hi! I am interested in purchasing my first rental property. I am located in NJ, but home prices are quite expensive nearby, so I have started to look at cities around the US that have cheaper prices, high population growth, and real estate markets that are appreciating. Some examples are Fort Worth, TX, and Charlotte, NC. 

While these cities seem quite appealing, I am worried about purchasing a property far away that I cannot easily commute to. Do you think I should look at cities far away, especially for my first investment? Should I travel to these cities to look at houses in person, or would you recommend working fully with a PM or someone else to take care of this? What are some other pros and cons of long-distance investing?

I would love to hear your thoughts on this matter if you have prior experience with long-distance investing. Thank you!

 I recommend looking at cost to acquire property over how expensive a property is.  For example $50k out of state gets you $250k home.  $50k in NJ can get you $1million home if you are house hacking.  $25k gets you $500k property in NJ.  Out of states it gets you $125k property.  

Next I would ask what has happen since the home was built to be where it is today.  For example if it took took 100 years for a property to become worth $125k what will it become in 30 years?    NJ is an expensive state to enter becuase we have huge demand.  Not just when it comes to purchasing a home but in terms of rental increases.  Seeing $100 -$300+ rent increases each year for  single unit is common in NJ.  

If you can purchase a property for much less money down, in a state with high demand and huge history of appreciation and in the process reduce your cost of living easily moving property to property in a market you already know do you think this is a huge risk? 

@Arun Maheshwari that depends on the individuals comfort level, proximity they are looking for, rental strategy and more.  I have clients cash flowing through most of Central and North Jersey

Lots of advice here, all you need is 25% down and be open to paying 8% each month to property management to make all the profits on their inhouse management teams while you cash-flow $200-$300 with little to no appreciation. Repeat this 40 Times and you'll win the game.

Quote from @Mandy Wang:

I just bought a 3 family house in Union City NJ and there's a tenant without lease, pays on time, has lived there for over 10 years. My family would like to move in and occupy the unit but I just can't seem to locate an attorney who can work on this. Is it impossible to evict this tenant? Has anyone heard of any success stories similar to this scenario in Union City? I spoke with one attorney, and he flat out told me it's impossible to evict. Any advice is much appreciated.

If you can show you are intending to move in to the unit owner occupied laws will favor you.  With that being said Union city is notorious for horrible land lording laws but it is not impossible. "Impossible" means do not work with that attorney.  It is possible because state laws allow you to owner occupy if you can show you have not place to live, you own the property, and you need to move into a unit that does not have lease in place.  

Quote from @Arun Maheshwari:

Hi,

Are there any specific areas/location in New Jersey where you can get some cash flow generating deal on a single-family/multi-family or townhouse?

Its so hard to find cash flow generating deals given high tax rate in NJ and also higher interest rate environment.

Hi Arun,

Cash flow can be tough unless you are open minded to major c renovation or creative rental strategy.  I have client getting cash flow deals every month, the ones that do mostly never buy turnkey.  With all that being said the success in NJ comes from finding properties in the right location (landlord friendly town, high rent increase locations).  Cash flow can happen but what is most important is finding deal that will allow yearly rental increases.  For example a deal that breaks even on day 1 will look very attraction with $300 rent increase each year and 5% appreciation.  These types of properties are actually pretty easy to come across.  Cash flow can happen early on in NJ but it can compound big time each year if done right. 

@Michaela DeJesus House Hacking still can work in your situation. The biggest thing will be putting cash to work.  From the down payment alone what's you best bet, $125k property somewhere using 20% down loan. 

If you can leverage an owner occupied loan you potentially can get a property over $600k with 3.5% down. The question I always ask is what will the $125k property look like in 30 years compared to the $600k.  Will the it be a $150k property?   High appreciation with high rental appreciation has potential to produce well for you, especially if you are open minded to different strategies. 

Quote from @David Pimentel:

Looking to begin investing as a beginner I live in NJ and prices are a bit high for what I can afford. Especially since I own my primary residence so house hacking isn't an option. Any ideas where I can look to invest i do have a good amount of equity in my home to use as a down-payment. Any suggestions. Thanks 

 Sell Primary or Rent Primary and 10x your investing journey via House Hacking... I own primary single family home with my wife, we had 2 kids at the time.  We sold the property, moved into multi families, hands down best decision we made.  Had we done it any other way we would still be stuck saving for adown payment.  

Quote from @Jake Yuskaitis:

Quote from @Shawn Mcenteer:

Quote from @Jake Yuskaitis:

I live in NJ and i honestly would not recommend doing this in NJ. I think you'd be much better off investing in rentals in PA and renting while living in NJ.

will also allow your lifestyle to be flexible to go where the money goes in terms of career trajectory.

 I could not disagree more.  I live in NJ, have been investing for over 10 years, leveraging house hacking strategy for myself and dozens of clients each year.  When doing an apples to apple comparison of what it take to purchase out of state compared to what it cost to house hack in state and advise someone to leave the area they are in and go out of state is wild to me.  From the down payment and owner occupied loan options alone this advice is backwards on top of this you are suggestion they rent in NJ?   

I don't suggest anyone own long term rental in NJ. The laws are not in favor of the landlord.

 I am over 10 years in; I have collected every payment of rent and never had to evict a tenant.  Was the same for my mentors and their mentors.  Of my clients it is extremely rare to run into situation where tenants are the issue or rent is not collected.   

When you truly know and understand the laws in New Jersey, investing becomes very easy with very little hassle.